Federal And State Sponsored Home Buying Programs

The assistance offered to potential home buyers is not as limited as some might think. Despite the slowdown in new home building, houses are still being bought and sold. There are new home buyers seeking a place to call home out shopping right now. They are seeking the best way to finance a new home and the government has sponsored several different programs to help. The Veterans Administration helps our active and retired military personnel buy homes and FHA and HUD help civilians buy homes. There are still other home buying programs offered by individual states that help low income to moderate income families.

The Veterans Administration offers several home buying programs. The VA loan is great for first time buyers. While many mortgages require up to 20% down, the VA offers first time home buyers loans for 0% down. 100% of the home's value is mortgaged. The VA has less strict credit requirements as well, making it easier for a lot of first time home buyers. In addition to all of these great things the interest rates are generally lower than conventional loans by .5 to 1% and because a VA loan is backed by the US government, private mortgage insurance (PMI) is also not required. This lowers the monthly payment by $100 to $300. VA loan products are available to active duty military and to veterans.

FHA, the Federal Housing Administration, has a program which helps would-be homeowners buy a home. FHA does not give out loans; it only backs the loans that are made to individuals. Qualifying for an FHA loan may also give you the eligibility to receive down payment assistance from several different charity organizations: Ameridream, Nehemiah, American Family Funds, Family Home Providers, Futures Homes Assistance, Grant America, Housing Action Resource Trust, Newsong, Partners in Charity, Responsible Home Ownership and Quickdown. Each of these agencies helps with down payments or closing costs to new home buyers.

An FHA loan will finance up to 96.5% of the purchase price, requiring only 3.5% down. The loans are for people who plan to occupy the home they are purchasing only. The upfront PMI is factored into the loan. Fixer-uppers can also be financed through FHA loans. A 10% to 20% reserve fund is made available to the buyer and can also be used to cover any additional costs for the remodeling. These loans are officially known as FHA 203(k) loans, which are also available as refinancing loans.

HUD, the US Department of Housing and Development, sponsors state home buying programs. The programs are like the Georgia Dream Homeownership Program, which gives potential homeowners down payment assistance and low interest financing. Low to moderate income families are offered fixed rate mortgages at low interest rates. The program also includes homebuyer education.

There are many home buying programs to examine before you purchase your home. Consider each one, determine if you are eligible for the programs and then make your decision to buy. You may be eligible for down payment assistance, closing cost assistance and low interest rates. Find out which programs offer the most assistance and apply. Be patient because you are among many seeking this help. It may require a lot of waiting, so be prepared.

By: Jeremy C. Winters

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